Shropshire Pub First to Win Rates Appeal under new Regulations
The decision of The Valuation Tribunal For England is the first successful appeal by a pub under the new Check Challenge Appeal Regulations which came into force last year which now govern the appeal process for rates.
The Fosters Arms, a Grade II listed building dating back to the 1700’s, which was described as full of character and a typical “boozer” at the hearing, successfully argued that its rateable value, used to calculate business rates tax from 2017 until 2021, should be reduced.
Under last year’s revaluation, the pub saw its rateable value rise by a fifth to £16,200.
The pubs challenge was treated by the Valuation Office Agency, an executive of HM Customs & Revenue, as not “well-founded” but the President of the Tribunal after a contested hearing reduced the rateable value to £13,000 based upon fair maintainable trade of £190,000 and a percentage applied to arrive at a virtual rent of 6.9%.
Real estate advisor Altus Group says this successful appeal would lead to a potential reduction in business rates bills of around 72% because the pub would now come within the scope of small business rates relief which tapers liability from 100% at £15,000 to nil at £12,000.
The main issue in dispute between the parties concerned the category the pub should be in for the purposes of the Valuation of Public Houses Approved Guide for the 2017 Rating List. The Valuation Office Agency had valued the pub in Category 1 but the pub’s contention that it was a Category 3 was upheld by the President.
The decision of the tribunal, according to Altus Group, will save the pub £22,330.82 over the 4 years of the rating cycle.
Robert Hayton, Head of U.K. Business Rates at Altus Group, said “We are delighted for the publican on this case, and very happy to see that the new Check Challenge Appeal system is working to protect ratepayers from paying too much.
“The VO didn’t consider the ratepayer’s case had merit at the Check or Challenge stages but the system ensured an appeal could be heard quickly by the independent Valuation Tribunal whose panel decided in the ratepayer’s favour.
“Rateable values can go up as well as down so it is important to understand the risks before launching any Check, Challenge or Appeal.”